Published by Andrew Haldenby on 12 February 2016
- Our Work
- The Reformer Blog
25 January 2016
In the latest Prospect magazine, the distinguished commentator Anatole Kaletsky warns on “unsustainable cuts to core public services”. Specifically he argues that the Government should do more to increase fuel taxes and reduce spending on pensioner benefits:
“Such a rebalancing of spending and revenues – steadily increasing energy taxes and gradually reducing pensioner handouts – is a much more plausible mechanism for permanently improving Britain’s public finances than unsustainable cuts to core public services or Osborne’s gimmicky tax reforms.”
The former Times columnist is clearly right on the pensioner benefits, as Reform has argued for a number of years. It is fascinating to see the BBC (reportedly) making a similar argument on pensioner TV licenses today. A concerted campaign by the BBC against at least one pensioner benefit would be a big new factor on the political scene.
Whether “cuts to core public services” are “unsustainable”, however, is debatable. Certainly some cuts have gone too far. Cuts to social care appear now to be in danger of driving residential care and home care operators out of the market. The result would be more pressure on NHS A&E departments and a higher overall cost to the taxpayer (because private provision is cheaper than public sector provision).
Otherwise the honest answer is that it is hard to know. As the Spending Review showed, the government doesn’t have great data, or any data, on the performance of public services versus their costs. A lot of Reform’s work is investigating this productivity question at the moment.
Based on our recent work, however, my guess would be that Mr Kaletsky is overstating it. To run through the big public services:
The power of technology to change public services has been the big theme of Reform’s events programme so far this year. In the light of that, it is too big a jump to say that all public services are unsustainable at current budget levels.